Adviser numbers have been on the decline over the past few years, and while it is a “candidate-driven market”, salaries, job security, flexible working and training are sticking points, recruiters have said.
A Freedom of Information (FOI) request sent by Mortgage Solutions to the Financial Conduct Authority (FCA) found that the number of staff advising on mortgages fell by around 15% to 24,422 in 2023 compared to pre-pandemic figures.
Ella Peabody and Alex Holl at Placing Faces, a mortgage recruitment specialist based in Sheffield, said the average salary for mortgage advisers has not really changed since the firm launched in 2016, and while commission could be “lucrative”, it doesn’t help in “slow periods”.
They said that employed advisers in the Midlands and the North have average salaries of £27,000-28,000, with some firms going to £30,000 but “very rarely beyond that”.
In the South and South West, the average is a bit higher at £28,000-30,000, while London and the surrounding areas go up to around £30,000-35,000, and possibly as high as £40,000.
“We noticed a lot of advisers leaving the market in 2023 due to a lack of business. We still get trainees coming to us, but companies understandably require more experience.
“Increasing salaries isn’t always possible but a ‘guarantee’ provides advisers with more financial security. More routes for trainees would help, networks could create adviser pathways – training them up and feeding them into their appointed representatives (ARs), encouraging more individuals to enter the mortgage industry,” they said.
Both said that while commission was improving, with offerings of 20% or higher becoming more common, it did not help in slower periods.
“A lot of our clients have restructured commission in recent years rather than done much to the salary, or [brought] in a self-employed model. Of course, this makes sense – it brings less risk, which obviously helps in these recent years of uncertainty. However, it doesn’t really help the adviser in the quieter periods,” Peabody and Holl said.
Recent figures from the FCA show that reported revenue from mortgage broking decreased from £1.58bn in 2022 to £1.37bn in 2022.
Low adviser numbers should lead to ‘candidate-driven market’
Peabody and Holl that the firm would have expected adviser numbers to have dropped further during the pandemic, but the “sector came out okay, all things considered”.
“Although the volume of active advisers has remained relatively similar since 2008, the number of advisory businesses in the UK has been increasing by almost 2% on average each year between 2018 and 2023,” they said.
FCA figures show that the number of broker firms has decreased to 4,104 firms in 2023 from 4,277 in 2022.
The regulator added that there were around 1,929 mortgage broker firms with 15,845 staff advising on mortgages. This was lower than the total of 1,964 mortgage broker firms with 16,452 employees the year before.
They noted that, theoretically, lower adviser numbers should lead to a “’candidate-driven market’” where companies are having to “compete for talent”, giving potential recruits more “freedom of choice”, but the data shows advisers are leaving the sector.
Peabody and Holl said that job security was a “concern”, with many advisers experiencing redundancy in 2023, and speculation about recessions could have dissuaded some from looking at jobs in property and banking.
They added that flexible working would be helpful, noting that they’ve come across firms that require staff to be fully office-based, with advisers working 10-12-hour days and weekends.
“The data shows that more can be done to support trainees and put things in place to keep experienced advisers in the sector. However, there are deeper-rooted issues that business owners are unable to change.
“We hope that more is done to get people onto the property ladder, helping to keep the market consistently busy. The good news is that 2024 has shown signs of positive improvement and we anticipate the ‘active adviser’ figure to rise this year,” they said.
Attracting talent not an issue but securing a role may be
Graham Turner, senior account manager at Pure Resourcing, said it was a “complex subject” with several factors, including the “introduction of fintech brokerages (enabling advisers to manage a higher volume of cases), market conditions, interest rates rising [and] regulation increasing”.
“Over the last few years, there has also been a surge in more specialist areas such as bridging finance, development finance [and] commercial mortgages – I have seen a number of regulated mortgage advisers move into these areas as the demand and rewards tend to be greater,” he added.
Turner said that the industry did not have a problem attracting talent as many complete their CeMAP but “struggle to secure a position in the industry”, adding that some who complete a CeMAP with a view to becoming a mortgage adviser may not have the relevant transferable skills and may find it hard to find a role.
“There is still plenty of recruitment going on [in] the mortgage industry, but from what we see from our clients, most of the time they want those that have proven success as a mortgage adviser; there is less risk,” he said.
Turner said that, anecdotally, there had been a shift to more advisers setting up on their own, and while they could be keen to grow, firms wanted someone with “a proven track record in the industry”, adding that his main challenge as a recruiter was a “lack of ‘quality’ candidates”.
“I do not see the mortgage industry having the same problem as the wealth/IFA market, where a large number of the advisers are nearing retirement and there is not enough fresh blood coming into the industry to maintain the numbers,” he noted.
Anna is currently the deputy editor for Mortgage Solutions and editor for Specialist Lending Solutions. She has worked as a journalist since 2019, having secured her Gold Standard NCTJ diploma from News Associates in a fast-track six-month course.
She started her career as a report at specialist publication The Insurance Insider covering a wide range of areas before joining Mortgage Solutions and Specialist Lending Solutions in 2021.
In her role, she helps put together and structure the news agenda for the day and writes up press releases, reports, interviews, analyses and exclusives across both titles. She also commissions blogs for Specialist Lending Solutions and hosts online masterclasses and in-person events across the business.
She has been shortlisted for three journalism awards, which include BIBA Journalist and Media Awards Scoop of Year Award in 2020, Headline Money Mortgage Journalist of the Year Award (B2B) in 2022 and 2023.
Prior to being a journalist, Anna worked in ecommerce across Snow + Rock, Cycle Surgery and Runners Need websites, and before that worked at specialist financial PR firm Rostrum.
In her spare time, Anna enjoys reading, seeing live music, and cooking for friends and family. When she gets a chance, she also enjoys hiking, skiing and indoor rock climbing.
